It might be an insolvency lawyer's job to be opinionated, but ask when the restructuring market will gather pace and a pronounced mood of uncertainty descends.

Perhaps this is because 12 months ago many were predicting the restructuring and insolvency market would have hit its stride by now – a forecast that has proved to be stubbornly premature.

But Goldman Sachs' recent recruitment of two top-level insolvency practitioners – James Sprayregen from Kirkland & Ellis in New York and Lechlan Edwards from Rothschild in Europe – underlines the expectations that the cycle will soon be turning. Likewise, Ernst & Young and PricewaterhouseCoopers have also expanded their restructuring departments.

Legal bellwethers include Freshfields Bruckhaus Deringer's recruitment of ex-Allen & Overy (A&O) partner Nick Segal from Davis Polk & Wardwell in June, while the more astute recruiters cite strategic demand for quality insolvency associates.

At whatever point companies are going to start calling in the administrators, however, firms are aware that they need to take steps to prepare for a very different kind of restructuring market. And in this new landscape, as underlined last week by several top-level contributors to Legal Week's insolvency focus, private equity houses and hedge funds will be far more important.

The demand among hedge funds for distressed debt means a number of roles that largely did not exist in Europe's 2001 restructuring boom need to be served. Take A&O's role on the mammoth restructuring of Eurotunnel as a recent example. The magic circle firm is working alongside Latham & Watkins for the bondholders, which have turned out to be playing a major role in the negotiations.

Another difference from the last restructuring market will be the amount of distressed companies that are owned by private equity houses. This is interesting for two reasons. First, it will further shift the dynamics of debtor and creditors, since sponsors will likely wield more clout than shareholders have traditionally enjoyed in insolvency, and could even create commercial conflicts for advisers – are firms really going to act so aggressively towards a relatively small number of buy-out giants that could be the source of their next mandate?

Second, lawyers predict that buy-out houses will often need separate restructuring advisers who might already be busy advising other parties on the process. Traditional private equity specialists such as Macfarlanes, Travers Smith and Ashurst might be encouraged to build their presence in restructuring. This shift looks even more promising for firms like Latham, Kirkland and Weil Gotshal & Manges, which are equally comfortable with the corporate or insolvency role.

Firms will also need to prepare for this shift by making sure they have lawyers who are able to thrive in what is essentially a more US-style process. This means a major premium is being placed on recruiting the limited supply of associates with hedge fund experience among the many insolvency teams eager to ensure they have the right skill-set for the next upturn in restruc-turing work. Just don't ask when it's coming.